We are in the heart of earnings season so news both from corporate American and about the economy will be front and center. For the time being Europe will take a back seat.

This morning the retail sales report showed a fall of .5% which was the third month in a row of shrinking sales. The expectation was for it to gain .2% so it was a bit of a disappointment. The last time sales fell three months in a row was in the recession in 2008. Without retail sales growing there will be no job growth. Our economy is 2/3 consumer driven and when the consumer decides not to spend we are in trouble.

It is interesting to note that last week’s personnel debt rose sharply implying that retail sales would rise as well, but that was not the case.

Looking deeper into the report auto sales fell by .6% which was a surprise because the auto industry sales numbers for June reported an increase. More discounts would account for the decline. Excluding autos, sales still fell .4% so it was broad based. However, the biggest decline came from gas stations, down 1.8% which drags down the overall sales number but it a good thing as it puts money in people’s pockets to spend or save as they see fit. In this instance they decided to pocket the money rather than spend it on other things.

There is no spin you can put to the number to make it better. Sales were soft across the board as consumers tighten their belt. Who can blame them as the news media tells us all how bad things are. This is a case in which fear drove the consumer to retrench a bit.